I. This report analyzes WIN Plc and its recent performance through interpreting information from corporate financial statement as well as several external sources. There will be an elaboration of corporate performance through interpreting financial ratios and corporate position and prospects from management and external observers. II. Background WIN is a technology company performing business activities in the mobile data market.
The company provides customers with technology solutions for mobile messaging, mobile content and mobile internet. The services provided by the company enable businesses to deliver and bill for entertainment and information services aimed at consumers. It also enables corporate customers to perform mobile data transfer such as sending and receiving text messages, delivering ring tones and icons to and from large number of mobile phone users. The company has a powerful presence in the United Kingdom.
The WIN plc has wide range of products includes the WIN Gateway, which enable premium rate SMS connections to all 4 networks; the WIN MMS Gateway, enabling cross-network MMS deliver; the WIN Text Console for Running SMS campaigns and WIN media Console for mass inbound texts and voting. Its consumer includes network operators, media and entertainment providers and enterprises; like Orange, CapitalOne, BP, Guardian Unlimited, Vodafone, Camelot, AA, Liverpool and O2. III. Company Performance Financial statements are the information that investors love the most to see in detail.
They are composed of the balance sheets, the cash flow statements, and the income statements (‘The Analysis of Financial Statements’, 2006). The performance of the three accounting policies in WIN plc is as following: III. 1 Profit and Loss Account The income statement (also known as profit-and-loss statement or P&L) is the first financial statement that we find in an annual report. It shows the revenue, expenses and profits for the company during the past year (‘The Analysis of Financial Statements’, 2006).
Usually we can use the income statement to figure out cash flow, profit margins, and other financial metrics for the business. Most importantly, though, the income statement contains the proverbial bottom line: profits. Concerning the WIN plc, their company revealed a 35% increase in turnover, a 50% increase in gross profit and 0. 8% increase in net profit. This revealed the increasing cost structure of the company, which means increasing prices, and less efficiency (WIN plc. 2006).
The good reason to explain it is WIN plc is able to maintain their sales performance. It means that WIN plc’s percentage in sales is much more than in cost of sales. Therefore, the result, the profit, was still good enough. This kind of profit section of the income report is the part to which investors pay the most attention. It shows whether the company made money or lost money. In addition, the net profit experience the smallest rate of growth because tax losses on ordinary activities.
In the end, the increasing cost structure and the tax losses causes the earning per share to experience a little downturn from 24. 3p (basic) to 23. 2p. 2005 is also marked with considerable acquisitions that increases administration expense and create amortization of goodwill expense (WIN plc. 2006). III. 2 Balance Sheet The second financial statement that we encounter in a company’s annual report is the balance sheet. This reflects a concept or equation that total assets equals total liabilities plus equity (‘The Analysis of Financial Statements’, 2006).
Many investors tend to focus on the income statement. In fact, the balance sheet is just as important a source of information. By poring over a company’s balance sheet, investors are able to determine the firm’s liquidity, to see how leveraged the company is, or just to see all the specific assets and liabilities of the company. The balance sheet of WIN plc in 2005 indicated a healthy growth displayed by the 44% increase of net asset. The 2005 balance sheet displayed a large number of intangibles and investment derived from recent acquisitions.
Acquisitions have also increased the number of fixed asset more than 100%. Furthermore, the acquisition of new equipments revealed an increase of 62% in current asset. This is caused by the increasing receivables from recent services (WIN plc. 2006). In addition, we also found that there are improvements as the company liabilities, which composed of debt, taxes, etc, are decline. The decrease in the liabilities is considered as a significant improvement for WIN plc.